Israeli gov't to offer incentives for 5G mobile networks

smartphone Photo: ASAP
smartphone Photo: ASAP

Mobile carriers are cutting back on investment because of lower profitability.

Sources inform "Globes" that the Ministry of Communications and the Ministry of Finance seek to encourage mobile carriers to deploy fifth generation cellular infrastructure. The plan is to provide incentives in the form of rebates in exchange for acquiring frequencies and rolling out the network.

The plan is similar to the frequencies auction held by the Ministry of Communications that led to Golan Telecom and Hot Mobile entering the market. Frequencies were awarded to whoever deposited the highest guarantees, which were gradually reduced in accordance with progress on meeting deployment targets set by the state.

The idea of incentives arises from the realization that mobile carriers are cutting back on investment because of the fierce competition in the industry and the erosion of revenue. At the same time, no solution has been found for the high fees that the carriers pay the state for frequencies, which result in them foregoing frequency allocations simply because they cannot meet the fee payments.

The government ministries have hired the services of InfoSight Consulting, which is working together with Beta Finance to formulate for the state a new frequency fee structure, as the high payments that the companies make for frequencies, around NIS 300 million annually, diminish their incentive to invest and represent a heavy tax on them.

The state will probably try to find a formula whereby carriers will pay more for "quality" frequencies, and much less for lower-quality high frequencies. In any event, the model will be determined before the fifth generation auction slated to take place this December. The new generation of networks will allow considerably faster data transfer.

Published by Globes [online], Israel business news - - on August 6, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

smartphone Photo: ASAP
smartphone Photo: ASAP
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